As digital payments scale across the MENAP region, card programs are becoming increasingly diverse, from gift and reward cards to fully digital credit and multicurrency card programs.
Behind these innovations sit two architectural models that define how funds move: open loop and closed loop. Each serves a distinct purpose, influencing how cards are issued, where they can be used, and the level of control issuers maintain.
Understanding these models is key for any business designing a payment experience that meets regulatory standards, adapts to local schemes, and scales with user demand.
Open-Loop Cards
Open-loop cards connect to global or domestic payment schemes such as Visa, Mastercard, Mada, or Meeza. They can be used anywhere these networks are accepted, across merchants, channels, and borders.
These cards are typically linked to a user’s bank account or wallet, giving them the freedom to spend globally while issuers retain compliance through scheme rules and settlement protocols.
Open-loop programs provide reach and scalability, forming the foundation for products such as prepaid cards, debit, credit, BNPL, or corporate expense solutions where interoperability and global acceptance matter.
Closed-Loop Cards
Closed-loop cards, on the other hand, operate within a private ecosystem, such as a retailer, corporate network, or a group of merchants. Transactions remain inside this defined environment, circulating funds between predefined participants.
This model offers faster setup, stronger control, and simplified compliance, since transactions do not pass through external networks.. It’s widely used for gift cards, loyalty programs, or employee incentives, where brand, control, or internal efficiency take priority.
While faster to launch and operate, closed-loop cards offer limited interoperability and cannot be used beyond their defined ecosystem.
Comparing the two models
| Dimension | Open-Loop | Closed-Loop |
| Acceptance & Reach | Accepted globally across Visa, Mastercard, and local networks. | Restricted to a single ecosystem or network. |
| Setup & Infrastructure | Requires BIN sponsorship, scheme integration, and scheme-certified processing. | Quicker to deploy; infrastructure remains within the issuer’s environment. |
| Scalability | Highly scalable across markets, currencies, and use cases. | Purpose-built for specific programs with limited reach. |
| Control & Data | Broader spend data but less granular control. | Full control of spend rules, flow, and data visibility. |
| Customer Experience | Delivers consistent standards and universal usability. | Enables branded, highly tailored user journeys. |
| Payment Method | Physical or virtual cards, integrated with digital wallets. | Physical or virtual cards, compatible with mobile wallets and supported by QR or biometric payment options. |
The Modern Approach: Interoperability by Design
The strongest programs today don’t choose one model — they blend both.
An ecosystem might start with a closed-loop structure to test adoption, then evolve into an open-loop card for scale and market reach.
This flexibility is possible when the underlying technology is scheme-agnostic and modular, capable of processing both internal and scheme-based transactions through a unified logic layer.
How does NymCard support both open-loop and closed-loop card systems?
NymCard’s modular infrastructure is built to support both types of card programs, giving banks and financial institutions the flexibility to choose based on their goals, compliance requirements, and growth stage.
Through our modular APIs, businesses can design, issue, and manage open-loop programs that meet scheme and regulatory standards.
At the same time, they can deploy private, closed-loop programs for loyalty, incentive, or disbursement use cases — all from the same platform.
And because NymCard’s architecture is interoperable, clients can start with one model and evolve to the other as their product matures — without rebuilding from scratch.
How NymCard Enables Both
Powered by n-Core, NymCard’s real-time processing engine, institutions can issue and manage both open- and closed-loop programs from a single infrastructure.
- Open-Loop: Connect directly to Visa, Mastercard, or regional schemes for authorization, clearing, settlement, and tokenization — all in real-time and with full compliance.
- Closed-Loop: Build private networks for payroll, loyalty, or incentive programs using n-Core’s internal ledger and spend controls — no scheme rails required.
With n-Core’s modular and interoperable design, businesses can easily evolve between models as their strategy grows — defining how money moves while maintaining control, compliance, and scalability across every program.
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